Opening the Day: A Financial System Meltdown... WHEEEEEEE!

by: Matt Stoller

Mon Sep 15, 2008 at 08:52


I'm at a Drum Major Institute event this morning with Governor Jon Corzine discussing New Jersey's new family leave insurance bill.  After a severe car accident last year, he's now apparently running marathons and he looks slimmer and more fit than I've ever seen him.  Corzine told a brief anecdote about how powerfully the Chambers of Commerce are opposing this bill even though it's "not a heavy lift on a financial basis" and their arguments are "BS".

The Paid Sick Leave/Family Care movement is working across the country, but it's just stunning to watch a pittance fought bitterly by the "business community" while taxpayers shovel hundreds of billions to the financial community with a massive bailout that is ongoing over the past year or so.

Here's Corzine.

Jon Corzine at DMI Event

Matt Stoller :: Opening the Day: A Financial System Meltdown... WHEEEEEEE!

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Al Giordano says redneck diva Palin (0.00 / 0)
has a tanning bed, is that as bad as a $400 haircut/ let's see what the MSM think?

http://narcosphere.narconews.c...


Can a tanning bed stave off S.A.D. in a low-light environment like Alaska? (0.00 / 0)
I know some doctors suggest "light therapy" for Seasonal Affective Disorder, which may be more prevalent as one moves toward the poles.


"It sounds wrong...
     ...but its right."


[ Parent ]
American Academy of Family Physicians says (4.00 / 2)
Tanning beds should not be used to treat SAD. The light sources in tanning beds are high in ultraviolet (UV) rays, which harm both your eyes and your skin.

http://familydoctor.org/online...


[ Parent ]
Well, that's that then, eh? (0.00 / 0)


"It sounds wrong...
     ...but its right."


[ Parent ]
Yes, tanning beds=skin cancer (0.00 / 0)
The lights used for light therapy are NOT the same as tanning beds.  

[ Parent ]
Americans Must Get Off the Yellow Brick Road of GOP Deception! (0.00 / 0)
When will Americans wake up from the illusion of the Wizards? Republicans are terrible on Economics and they are terrible on National Security and they have been terrible stewards of the Earth. They have Led us into a Fake & Phony war and have yet to fully implement the recommendations of the 911 Commission to keep this country safe and secure. That is not being strong on National Security!  Ground Zero is still a Dark Hole and open Wound and a symbol of their failed polcies! That is not change we can believe in and Enough is ENOUGH!  Let's expose the myth, deception and lies of the Wizards -- GOP (Grand Opposition Party)!  Let's get off the Yellow Brick Road of lies and deception and realize that the power lies within the people to so produce a working government for the people not a government hiding behind a Curtin of corporate greed and special interest groups! They have failed the American people and they have failed themselves. There is no lasting prosperity for theives and liars and the wrong one does will eventually come back to be reckoned with. This is their recokening.    Even Alan Greenspan has said Americans cannot afford the $3.3 trillion dollar tax cuts proposed by Senator McCain!  

Now the Grand Wizard, McCain, who is 72 years old has allegedly put his Country First and nominated for V.P. someone totally lacking in national and foreign policy experience, who would be a heart beat away. Woodward in his recent book "The War Within" states that the two sleeping giants when someone takes the oval office come January 2009 will be Iraq and Afghanistan, something Woodward says Bush was disconnected from. There will also be another Giant to face -- that of the economy.  Brokaw said to Sen. Shumer on Meet the Press Sunday past -- I thought when one picks a V.P. pick that they pick the most qualified candidate, referring to Obama not picking Clinton and chosing Biden instead. This goes both ways and McCain did not pick the most qualified person.  A president will have the Weight of the World on his or her shoulders.  Unfortunately for this Country McCain has made a very bad judgment call. May be he did not use his good judgment in this pick but something less honorable. Barack and Biden are ready to lead and to take up that weight. I do not think McCain and Palin are ready for such a daunting task. We need true leadership and not a false and deceptive wizard giving lip service to lies and deceipt instead of truth and light.


Im reading that FDIC fund may be exhausted shortly (0.00 / 0)
I didn't catch this last week - must have been another Friday at 1 am comment:

"Administration officials acknowledged last week that more bank failures were inevitable, and the main protection for depositors - the Federal Deposit Insurance Corporation - is likely to exhaust its reserves."

http://www.nytimes.com/2008/09...

Um. Bank runs anyone?

Michael Bloomberg, prince of corporate welfare


EU Central Bank Is Pumping Funds Into Money Markets (0.00 / 0)
That would certainly seem to back up your claim.  All in all some 7 billion in assets are going to be transferred to keep the market more liquid.  Of course, this only means that we will continue to experience sluggish (read no) growth for some time to come.  I fear that things are about to get considerably worse than they already are.

[ Parent ]
I Think You Are (0.00 / 0)
right about momentum shifting back to Obama.  Even the most ignorant among us must sense in their bones that the Wall St. meltdown means it is time for the big boys, and Sarah Palin can't play with the big boys.

as we help the big boys (0.00 / 0)
on ws survive look at the oil price fall, and they said the oil increase had nothing to do with speculators, it was all just the natural order of the economy, bs, deregulation is at the heart of the financial problem and most problems with our economy and system, and just in case no one has noticed the gop is the deregulation guru in america, throw a few hundred at the masses and they will again sit back and watch america become like nations with nobility and commoners as far as the haves (very few) and the have nots (the majority).

they are taking away your economic ability to live the american dream next they will take away your legal rights to protect yourself from govt abuses, welcome to america seen through the gop prism.  


the price of oil is dropping so whats the problem? (0.00 / 0)
yes speculators had driven the price up, and now they are driving it down betting on an economic contraction. they also bid the price of financial companies down like Bear, Lehman, et al. some of this has been bs insider trading - which the DOJ has decided not to give a crap about - even James Kramer says so - but that "speculation" is inherently bad is short sighted (no pun intended). Speculation is a market correcting force - when its not insider trading.

Michael Bloomberg, prince of corporate welfare

[ Parent ]
did i say the drop in oil was a problem (0.00 / 0)
the problem is we were told the rise was supply and demand not speculation which was nonsense, deregulation has given the theives in the markets the ability to affect all our buying ability and lifestyle at their whim, its one thing to be affected by speculators when one has chosen to be involved in that game quite another to be affected when you are using a resource needed to perform ones daily activities.
i guess we will just have to disagree, i don't think oil should be allowed to be speculated about when that amount of volatility is allowed to enter the game, more regulation is needed to stabilize oil for the non elites on mainstreet.
gop govt protects the corporate robber barons when they have a fiscal problem lets try and do the same for joe and jane six pack for a change.  

[ Parent ]
how would you trade oil without speculation? (0.00 / 0)
when companies, like say a bakery, buy oil delivery for six months out based on a guess what the price will be they are speculating on the price. if near term oil deliveries are being bought and solid at X dollars, but I can see winter is coming (less travel) unemployment is rising (less travel) the economy is shrinking (less manufacturing) and warehoused supplies are increasing (less manufacturing) and I don't need oil for 6 months, why not let me lock in a low price now through someone willing to sell me future delivery at a lower price.

Oil prices were definitely climbing in part due to a massive increase in demand from China and India. Speculation only works when there are underlying fundamentals to make the speculation profitable - or if there is insider trading forcing the price in a direction; the SEC and DOJ could get to the bottom of insider trading and put people in jail for both for oil run ups and financial instrument shorting - people probably should be in jail for tanking Bear. But without insider trading speculation run ups and run downs are legitimate and reflect and correct imbalances in the market place. when not moved by insider trading they reduce volatility.

This makes the Bush admin policy on energy all the more despicable. I personally think gas prices will hover around $3/gallon for the next several years just based on China and India demand. That oil would be up due to international demand was no mystery to most people watching China and India growth. But the Bush admin sat back and has done nothing to get out in front of this and encourage alternative energy sources in recent past years.

where I agree with regulation is imposing more stringent leverage ratios. Part of Bear's problem was hedge fund managers were over leveraging their mortgage holdings - which they considered invincible. a real recipe for disaster. reducing leverage allowances would bring stability back to hedge funds and investment banks. of course ironically last night the Fed lowered capital holding requirements for Bank of America - otherwise the Merrill deal would have been impossible - LOL! so they're going in the wrong direction there because the whole house of cards is so kerfarckered.

Michael Bloomberg, prince of corporate welfare


[ Parent ]
this was not a normal (0.00 / 0)
increase in the price of oil because of the demand from china or india, there has been a relaxing of rules letting this happen and i don't believe for a second that this doi or the sec are interested in doing their job (they haven't been lately).   (doi = dept of injustice)
just as today as i was watching the press conference with boa lewis he was asked if the govt gave him any help on the acquisition of ml by boa, he said they didn't ask for help, the reporter never followed up, my take is they didn't have to ask for help because the con govt is doing everything they have to in order to get another rw admin in the wh.
sorry to be so cynical but thats my attitude and we will just have to disagree as to where the fault lies here, my view is consistent, we have thieves running our financial system and other areas (iraq war etc) and if it looks like a fix it most likely is one, have a great day and be safe.  

[ Parent ]
Medical Records (0.00 / 0)
Now that Palin is the VP selection, the medical records become even more significant.  Who would be effective surrogates to ramp up the demand for him to release them?

I think this is a winning strategy, as long as it doesn't come directly from Obama's camp.  I think backlash potential is low -- the idea that older people would be indignant about it is not plausible to me; older people know better than anyone how performance can be negatively affected by health concerns.  It highlights McCain's age, and more importantly, puts front and center the possibility of President Palin, which I believe is a plus for Democrats.

The question is how to get the media hyped up on this question again.  Could a 527 run a spot, or would it be seen as too tacky?

Republicans can't fix our country; they're too busy saddlebacking.


# of Obama donors vs. people who check box on taxes (0.00 / 0)
I wonder if Obama has more total donors than the number of people that check the box on your tax return to publicly finance the Presidential campaign.  

John McCain

I'm with you on the shifting momentum (4.00 / 2)
The McMaverick (emphasis on the "ick") campaign went for it whole hog, benefited in the short term, but the chickens are coming home to roost. Here's why:

- The lies of McCain's campaign have given Obama, and the media, a whole lot to work with to reframe the discussion around deceit. When you're defined as a liar, everything you later say is diminished. This covers Palin, too, undermining her alleged reformer status.
- Palin speaks...and impresses no one. This is the biggest factor in the changing dynamics. A range of opinions on the Gibson interview but one thing was crystal clear: this candidate don't know much about anything and fails to impress as anything more than a symbol. The well-guarded, teleprompter-supported bloom has come off the rose. Thursday was the first day of Palin's return to earth.
- The economy really is a mess, and McCain has gone on the record too many times as being ignorant of it to inspire confidence.
- Obama's foreign policy ideas are slowly but surely becoming America's foreign policy ideas: the Malaki endorsement, the need for additional troops in Afghanistan, the reconstituted al Quaeda on the Pak/Afghan border, diplomacy, his restoration of America's standing in the world, all conspire against McCain, who's ideas have failed to factor in changing dynamics.

This week needs to be all about the economy and Obama is already off to a good start.


I agree (0.00 / 0)
Look for a bump in the polls by early next week.

Bush has run our economy into the ground and with 90%McCain out there still staying, "the fundamentals of our economy are still strong", people are going to do a doubletake on whether or not they can trust his judgment.  


[ Parent ]
More Palin negatives are being exposured (0.00 / 0)
David Talbot wrote a frightening article in Salon that exposed Palin's extremist theology.

"I pushed her on the earth's creation, whether it was really less than 7,000 years old and whether dinosaurs and humans walked the earth at the same time. And she said yes, she'd seen images somewhere of dinosaur fossils with human footprints in them." Munger also asked Palin if she truly believed in the End of Days, the doomsday scenario when the Messiah will return. "She looked in my eyes and said, 'Yes, I think I will see Jesus come back to earth in my lifetime.'"

http://www.salon.com/news/feat...

Palin picketed the only abortion clinic in the valley, she pushed to install creationists on the school board, she wanted to ban books about gays.

Another article exposes Palin's contradictions. Her high school team mate says she was never called Sarah Barracuda.

"To be honest, I'd never heard that name before," said Jackie Conn, Palin's backcourt mate who now lives in Anchorage. "I don't know if anyone actually called her that."

http://www.adn.com/sports/stor...

She once helped her father dress a moose but she was too squeamish to hold the eyeballs. When she was governor did Palin need to harden her heart to put a bounty on severed wolf paws?


She had STAFF to touch the severed wolf paws (0.00 / 0)
I suspect.


"It sounds wrong...
     ...but its right."


[ Parent ]
Dinosaur footprints .. (4.00 / 1)

The human and dinosaur footprints is an old creationist dodge.

A type of dinosaur had a footprint sorta like a human footprint, and some have been found in ancient fossilized mudbeds, along with obvious dinosaur footprints. It is touted around as "evidence" of simultaneous dinosaur and human existence.

www.scienceblogs.com could probably be more specific, or
www.pandasthumb.org


[ Parent ]
Footprints to the end of days (0.00 / 0)
Pray Gwen Awful asks her at least one tough question about this, and has learned how to follow up on the answer.

Michael Bloomberg, prince of corporate welfare

[ Parent ]
Are you kidding? The financial crash is GOOD for John McCain! (4.00 / 2)
Because he's the change agent, remember? I mean yeah, he's going to continue pretty much the same policies that helped get us into this mess in the first place, but it'll turn out differently this time, because it's a WAR HERO who's enacting the doomed policies!

Meanwhile, over in Hannityville, everything's coming up roses because the economy is doing GREAT!


Agree on Momentum (0.00 / 0)
The financial meltdown currently occuring is bad for McCain becuase it refocuses the campaign away from his trivial BS to real and serious economic problems facing the US.  McCain doesn't want to fight on this ground, especially since he is on record as saying he knows little about the economy.

I don't feel bad for the Wall Street types but this is bad for our economy b/c it locks up the credit markets and that is important for economic growth.  I say that as someone who is in the process of trying to start an online business.  I am going to bootstrap it now but if it were easier to borrow money I might well have gone that route and tried to do it full time instead.


Did anyone else see him in Florida (0.00 / 0)
arguing we need to have free trade with Colombia because they rescued American hostages in the countryside?

and people were cheering like it was the greatest idea ever?

Um...how about how many jobs it would cost us? Oh, no, that doesn't matter, Colombia freed a couple of hostages, screw you Michigan!  


[ Parent ]
Don't Forget We Are A Nation of Whiners (4.00 / 3)
Now is when you use the Phil Gramm "nation of whiners" comment in a commercial.  It would make for a devistating commercial.

[ Parent ]
Matt, I think the tide is turning ... (4.00 / 3)

Based on looking at the polls & what's in the news media, I think we are emerging from McCain's election bounce and the Sarah Palin celebrity bubble, into a position much closer to the realities.

That probably leave Obama still marginally behind, but with the election still within his grasp.

Considering:

- The fundamentals of this election still lean Democratic.
- Palin has revived the McCain campaign, but the general attitude to her now is much more critical.
- Her drawbacks to McCain are now more apparent - his own "buzz" goes down significantly when she is not around, so that they have to campaign as a team to attract Obama-size crowds. Her less-than-stellar record in office and their reputations as "mavericks" and "agents of change" are in question.
- Obama's spectacular money achievements are attracting headlines, making him look unstoppable.
- Economic woes turns people more towards the issues, and should be better for Obama,

as long as Obama hits on a good strategy between now and elction day, & keeps on message, he should win.


Biden's remarks look pretty encouraging (4.00 / 1)
Biden is well-suited to play the "whatever happened to that guy" card against McCain, i.e. contrasting McCain's previous persona with his current slimy campaign.

And by the way... (4.00 / 4)
On Friday, I called it.  Clearly, the Obama campaign is reading my comments and taking my advice. :)  

[ Parent ]
New York (0.00 / 0)
Anyone got any comments on the newly released Siena poll that shows Obama up by only 5 now in New York?

http://www.syracuse.com/news/i...

I haven't been able to locate the detailed breakdown, I assume Siena (like other NYS polling organizations) breaks their data down by upstate/downstate.  Since little to no campaign advertising is aired in upstate NY, and if McCain is making gains upstate, this poll might be an interesting barometer of how much national media coverage of Palin affects things, on the baseline.

This poll was taken Sept 8-10 and things may have changed, but lordy, that's a slide.


Siena is crap (4.00 / 1)
they had McCain up in New York in like May.

Siena is the worst polling firm in New York. I'm from there. Siena, I believe, had Lazio one point up on Clinton a few days before the 2000 election. At one point, they polled her against McCain and only had her up 5. If Clinton was the Democratic nominee, she'd be easily over 60% in New York.  


[ Parent ]
Exactly (0.00 / 0)
Marist and Quinnipiac tend to be the most accurate NY state polls.

[ Parent ]
Paying attention to that violates my personal rule (0.00 / 0)
I call it ThomasPaine's rule:

"Ignore any poll that defies common sense and runs counter to all other polls, until its results are verified by another poll."

Catchy rule, isn't i?


[ Parent ]
Wouldn't worry too much about it... (0.00 / 0)
...outside the big cities--upstate and Long Island, especially--New York has always had plenty of Republican strongholds. That said, I don't ever see the state going into the McCain column.

Oh, and those of us who live in NYC have always known that Rep. Charles Rangel was shady. That offensive comment about the Dominican authorities is kinda indicative; the African-American political bloc in Harlem is kinda noted for its chauvinistic attitude toward neighboring Hispanics. Years ago, that's partly what led some rather prominent Puerto Rican politicians to jump ship and back Rudy Giuliani.  

"This ain't for the underground. This here is for the sun." -Saul Williams


[ Parent ]
Turn Social Security over to the wizards of Wall Street? (4.00 / 2)
This is the sound bite that could destroy McCain if Obama is willing to push it to the max.

Does it make sense to turn our Social Security funds over to the same overpaid Wall Street wizards who are driving our economy into a deep pit? John McCain thinks so. He's been cheerleading for the Republican crash-and-burn economic plan for 2 decades. He still thinks letting money manipulators run wild with our money is a great way to run a country. Don't let John McCain give the Social Security trust fund away to the geniuses who brought us Enron and Bear Stearns and took over Fannie Mae. Friends don't let Bush and McCain and the Republican Party get their hands on any more of our money.


note to Obama campaign (0.00 / 0)
hire DaveW to write your ads!

[ Parent ]
"Empty Seats Greet McCain" (0.00 / 0)
This leadin from a Robert Barnes column in the WaPo strikes me as both telling and hilarious:

Republican presidential nominee John McCain held his first rally without running mate Sarah Palin today, and let's just say there were seats available.

The McCain "Road to Victory" rally was originally scheduled to be a pancake breakfast, but the campaign said there was such an outpouring of enthusiasm the event was shifted to the 15,000-seat Jacksonville Veterans Memorial Arena.

The may not have been the best idea: There were almost no supporters in any of the cavernous arena's 24 upper-level seating sections, and only eight of the 21 sections downstairs held fans. Only four of those were filled, though some supporters crowded around the stage on the arena floor.

McCain and wife Cindy made a point of thanking supporters for coming out on "a Monday morning'' for the 9 a.m. rally.

Sorta like Pat Sajak with no Vanna.


Economy, health, fear (0.00 / 0)
Though the timing is hard to tell, and I'm guessing that some powers-that-be would love to manipulate it to favor McCain in November, my sense is that the wheels may very well be coming off the "speculation" industry we once called our financial system, at least in some significant ways.  

If the financial market/economic news continues to be bad enough, I'd think it could sharply ratchet up voters' economic fears, even if they pay a little less at the pump in the weeks ahead due to a dip in the price of oil.

This opens up a high-gain opportunity for Obama to clearly place the blame for this on the McCain/Bush Republicans, including the likes of "its a psychological recession" Phil Gramm, who pushed through the dereg laws that brought us to this point, and who was (is?) McCain's senior economic advisor.  Obama's already been focused on this message, now he needs to drive it home in a big way that leverages the current upheaval and anchors it in voters' minds with strong emotion.

I'm intrigued by the push by MDs for release of McCain's health records and thought the BNF video was very credible and impactful (though I don't know how many folks will see it or how influential it'll be).  How the Obama campaign can play this card is another matter, but maybe there's a chance that the MSM will pick up on it so he doesn't have to push it.  I wonder what others think about this.

My sense is that the most effective overall narrative would include some elements of the following, presented in a much more concise and skillful and less crude way than I do here:

1.  The irresponsible deregulation pushed by Bush/McCain/Gramm Republicans and their lobbyist cronies have brought our economy to the point of collapse, after doing nothing to help the middle class for the last 8 years.  That's a raw deal if I ever saw one.  Current economic realities, accentuated by the financial crisis, should magnify the impact of the message that "we can't afford another 4 years of Republicans' irresponsible, incompetent and corrupt control of our government."

2.  McCain is so afraid to address these real and important issues that all he can do is make up lies, smears and stupid, petty distractions.  The media and even Karl Rove and McCain's own campaign managers have conceded that this is what they've been doing.  Its outrageous and deeply irresponsible that they'd do this while the economy shows signs of an impending meltdown.

3.  Rather than pick a VP who has the kind of experience that could help McCain deal with the economic crisis, the Iraq and Afghanistan wars and other global challenges, he picked a poorly informed and inexperienced person whose main virtue is that she mobilizes the extreme right wing of the Republican Party.  Sarah Palin couldn't even successfully manage a project to build a sports center in Wasilla, AK.  Can you imagine her dealing with a global economic crisis?  Its a scary thought (even if we can be confident that she won't blink).

4.  Now, on top of all this, we find out that McCain's health may be more precarious than he's let on, and that he's restricted access to his health records to hide this reality (show BNF's new video about this).

5.  So, here we are, struggling with the failed policies of 8 years of Republican rule, fighting two wars and on the brink of a financial meltdown.  And McCain is asking us to give these same failed policies another four years.  And, on top of that, he's hiding information about his health risks, while picking as his successor a person who only two years ago was the failed mayor of a town of about 6,000 people.

6. If Maverick means irresponsible and dangerous, one who will put your economic welfare and the safety of your children at risk just to win an election then, yes, John McCain's a Maverick.  But every day it becomes more and more clear that we can't afford to have our national economy and our childrens' future be the latest plane crash piloted by this infamous hothead.

The Republicans have, over the past 8 years taken us to the brink of economic disaster.  Every day it becomes more and more clear that electing McCain-Palin will push us over the edge.  Don't let them distract you from what's important.

McCain-Palin:  irresponsible, incompetent and downright scary.


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